Primus Green Energy believes that its innovative STG+™ process dramatically changes the economics of small-scale GTL, helping to reduce flaring and recover value for unconventionals producers.
Gas-to-liquids (GTL) technology is often only considered as a last resort. For most operators, it is a solution examined out of necessity rather than economics – the result of crippling supply logistics or working in remote locations. When it is economical, it is on the scale of billions of dollars. But if it can be made cost-effective, it could prove to be a transformative approach to a wide array of operator problems.
One major result of the US’ shale boom has been a glut of natural gas, and a corresponding fall in prices. Even with multiple LNG trains, it has far more than it could consume, and nowhere near infrastructure to move it all around. The result, for many producers, is simply to flare associated gas from oil wells, for want of being able to produce a valuable or usable product. According to data from the EIA, the volumes of vented and flared gas have more than doubled since 2008, to around 290 billion cubic feet (8.2 billion cubic metres) in 2014.
Globally, some estimates suggest producers and refiners flare US$50 billion of gas per year. Even if one disagrees with the price, it is a lot of money. Even with a supply glut, recapturing even a small chunk via technology such as GTL is a worthwhile proposition.
Lowering the volume
In general, the problem with GTL is volume. The most efficient and economical plants rely on massive scales and massive feedstock supply to maintain viability. Most GTL technologies currently in use are only economically viable if they can produce 100,000 barrels of fuels per day; even a large single-well flare in the Bakken may only manage 250 bpd.
Enter US-based Primus Green Energy. In developing its proprietary STG+™ technology, the New Jersey-based firm believes it can also dramatically change the economics of small-scale GTL operations, and with it, recapture some of the value otherwise lost from flared gas. Its system converts synthetic gas (syngas) to gasoline (or alternatively, methanol) via a catalytic thermochemical process, at an efficiency of around 70% by mass.
In Primus’ GTL system, associated and/or natural gas undergoes steam methane reforming to become syngas, before the STG+ process then coverts it to high-quality usable fuel. The company’s CCO, George Boyajian, broke the results down into numbers. “STG+ converts around 1 million Btu of natural gas to between 4-5 US gallons (14-18 litres) of gasoline, or double that for methanol,” he told InnovOil by phone, speaking from a GTL conference in London.
In terms of plant capacity and feedstock, the smallest units will provide up to 500 bpd or 160 metric tonnes of methanol from 5 million cubic feet (140,000 cm) of gas. This can be scaled up to 2,000 bpd with the aid of a larger methanol reactor, and with the potential to scale up further via additional trains if required. “This,” Boyajian explains “is based on the largest methanol reactor we can safely put on the back of a truck in the US and get through underpasses. From there, we would build multiple trains to scale up, and you do see significant savings at the larger [of those] scales.”
The result offers producers an additional revenue stream from gas which would otherwise have been flared, and at a far smaller scale than the market has seen work before. “It’s not necessarily more carbon-efficient [in terms of fuel conversion rates] but a lot more capital-efficient,” Boyajian adds. In a world of ultra-low gas prices, this may count for a lot.
An additional benefit, both practical and economic, is that the system is modular. The equipment is manufactured and tested at the company’s main site, before it is moved to a pad on-site and connected to the existing infrastructure. This allows it not only to be mobilised and set up quickly, but also to be re-deployed if the operator chooses. “If it isn’t economical in five years,” he says, “You can pick it up and move it if you need to, and be up and running somewhere else in 8-12 weeks.”
Not only this, but a plant can be up and running within 18 months, rather than the 4+ years it may take to develop a plant of larger capacity.
Tipping the scales
So far, the response to the technology has been positive. At the moment it provides particular solutions to particularly thorny problems. Boyajian says: “The people that have been coming to us are people with very specific needs. Maybe it’s energy security, in that they can’t get gasoline where they are but they have natural gas, so we can make gasoline for them.”
Others may come down to a question of pure logistical economics. “With methanol,” he says, “They might be bringing it in from the Gulf Coast at US$0.25 per gallon to get it to the centre of the US. We can reduce that cost by 75%, and they get a better source of methanol at a lower cost.”
Although he avoids quoting a cost-per-barrel figure for Primus’ technology, he maintains that STG+ is amongst the most competitive options in the sector. “At large scales, it’s all about the same, but at small scales we’re just so much less expensive to build,” he continues. “We’re well under the US$100,000 per barrel figure that people throw around in the GTL space.”
The success of Primus’ strategy, Boyajian suggests, lies in its reverse-engineered approach to innovation. “Our mode of development is to make a perfect product and engineer the costs out of it – that’s how we approached both the gasoline and methanol systems.”
He is keen to impress that the set-up and expertise of his 50-strong team are also key to the company’s capabilities. “One of the reason we can surmount all these challenges is that everything’s under one roof, we’re completely integrated. We make our own pressure vessels, we fabricate, we build, we operate, we do all the instrumentation – and that allows us to be very cost-effective.”
The next step is to apply this methodology to other fuels. Diesel and upgrading octane are on the company’s radar, although the process is not yet perfected, Boyajian explains. “We make a beautiful ultra-low sulphur diesel but the economics just don’t work yet,” Boyajian continues. But the firm continues to look at ways of lowering the costs to the point at which the technology may prove successful.
For now, though, “business is good,” he enthuses – and with low natural gas prices expected to stay for some time, Boyajian sees “a great opportunity” to help producers recover value.